iFlytekโs net profit for the third quarter doubled year on year to RMB 184.1 million (around $26.1 million), coming shortly after the company was added to a US trade blacklist earlier this month.
Why it matters: iFlytek was one of several Chinese artificial intelligence (AI) firms included on the so-called US Entity List, effectively blocking the company from doing business with American firms without explicit permission.
- The ban will not have a significant impact on iFlytekโs operations and development, CEO and chairperson Liu Qingfeng wrote in an internal memo to employees shortly after the ban was announced.
- iFlytek is one of Chinaโs national โAI Championsโ alongside Sensetime and Hikvisionโwhich were blacklisted at the same timeโas well as Baidu, Alibaba, Tencent, and Huawei. These companies have been tasked with spearheading Chinaโs AI efforts as it seeks to become a technological leader by 2030.
Details: While third-quarter profit increased by 108%, the companyโs revenues grew by just 13% year on year, iFlytek said in a filing to the Shenzhen Stock Exchange.
- Cash received from investments made up a substantial portion of its growth, reaching nearly $1.9 billion compared with $74 million during the same period last year.
- iFlytekโs revenue for the first three quarters grew by 24% year on year to reach RMB 6.6 billion.
- The company said macroeconomic factors have impacted the growth of some of its businesses as the government, banks, and private sector have tightened their belts.
Context: iFlytek focuses on natural language processing, speech evaluation, and speech recognition. The company says it has more than 70% share of the market in China.
- iFlytek provides several products, including translation and transcription services, to Chinese consumers. It also offers its voice recognition platform to Chinaโs healthcare and education industries, as well as to the countryโs judiciary.
- The company was included on the US Entity List for its alleged involvement in Beijingโs treatment of Uighur Muslims and other predominantly Muslim ethnic minorities in Chinaโs northeastern Xinjiang Uighur Autonomous Region.
